Mitigating Project Risks

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Running Head: RISK MANAGEMENT PLAN FOR BUILDING A BRIDGE

RISK MANAGEMENT PLAN FOR BUILDING A BRIDGE

MPM344 Project Risk Management

Risk Management Plan

Charles Williams

11/27/18

Table of Contents RISK MANAGEMENT JUSTIFICATION 3 PROJECT RISK IDENTIFICATION 4 PROJECT RISK ANALYSES 6 PROJECT RISK RESPONSE STRATEGY 10 PROJECT RISK MONITORING 11 PROJECT RISK COMMUNICATIONS PLAN 12 References 13

RISK MANAGEMENT JUSTIFICATION

With a large concern on the occurrence of the accidents due to the weaknesses in building it is important to conduct and write this risk management plan (Gerardus, 2018). On average, various accidents occur due to same failures in building or the construction. It is hence important to outline such failures occurring due to the ignorance of these subcontractors and contractors. The contractors and all persons in the construction of a public infrastructure needs to take some caution to save the lives of the people as well save their properties. The procedure hence needs to be outlined in developing options and actions to enhance the proper opportunities to evade any threats to the objectives.

In this project mitigation and contingency. This means that we try to eliminate or reduce any probability of occurrence of the peril. For contingency, we can try the best to find any other solutions to the peril (Gerardus, 2018). For my risk management plan the method I have chosen will be the waterfall risk management method. The waterfall risk management is most effective in traditional projects such as construction and other examples of more common engineering projects due to the uncomplicated nature of these projects.

PROJECT RISK IDENTIFICATION

There are several risks associated with the building of a bridge. From relatively small issues like severe weather, missed payments, or late deliveries to big problems like accidents on job sites or structural failures, people who do inspection, maintenance, and construction work on bridges face an extraordinary number of risks every day. Most contractors experience inconsistent cash flow at one time or another. Cash flow issues are not usually the result of ineffective money management. Instead, they’re caused by past due payments or not getting paid in full for work that’s been completed. This issue often leads to bankruptcy or the complete failure of the business. Workplace safety should be the number-one priority on every bridge construction site. Inadequate safety practices can lead to serious injuries or even death. Accidents on a job site can cause traffic and construction delays, along with added time to investigate and resolve issues, work stoppages, penalties and fees, increased insurance rates, low morale on the job, and significant harm to a contractor’s reputation. Every contractor tries to avoid it, but it inevitably happens: Work done on a bridge site doesn’t meet regulatory standards or contractual specifications. It costs time and money to fix the mistake. Even more, substandard work can hurt a contractor’s reputation. From small power tools to cables and connectors to vehicles, the equipment used on bridge construction sites is an attractive target for thieves, including workers onsite and people not affiliated with the job. Like other risks faced by bridge contractors, theft can have a broad impact. There are costs to replace stolen items. In addition, theft can result in delays while waiting for replacements and reduced productivity because workers don’t have the equipment they need to complete their tasks. It often leads to Medium insurance rates as well.

The analysis of subcontractors is important in the building (Steven, 2014). The durability is strongly based on the durability and the quality of the structure under construction.

In this risk identification, several things can be done. The problems associated to the potential and the currently occurring risks. Bridges are very common. Bridges are currently collapsing due to formation of cracks. This is caused by improper mixing of the contents into their correct ratios (Steven, 2014). Sand: gravel: cement ratios are very important in this construction as it relates to the final strength and support of the final structure. Similarly, the foundations of the different structures are very important. It proves the stability of the structure. It is also important to check on the permeability of the structure to fluids and especially water.

Similarly, the type of materials used as the requirements is necessary. The design of the structure further proves the support of the building (Steven,2014). There are aspects to be checked which includes; cost, performance, as well as the supplier capability, and technology. These aspects at some cases may influence the project.

PROJECT RISK ANALYSES

Risk Category	Description of Risk	Potential Impact on Project
Design Risks	Contractors design bridges using software before the real execution on the site. However, designers cannot fully comprehend the conditions on the ground. Later adjustments in the structural design are often associated with potential risks.	Execution period may be extended Additional material cost due to extended cantilevers or beams. Changes may also require further ground preparation that may increase costs. Modifications pose structural risks due to probability of unconsidered factors.
Contractual Risks	Contractors have the tendency of paying employees late.	Past due payment demoralizes employees, which in turn may delay project implementation. Delayed project presentation affects contractors negatively and may lead prevent future awards of contracts.
Management risks	Project managers should ensure the engineers working on the project coordinate well with the other laborers.	Slowed tempo of the project
Worker safety	Construction equipment can greatly harm users if they are mishandled. Project managers should ensure that workers obtain proper training for all equipment they handle. Additionally, they must have the proper personal protective equipment.	An injured worker is a lost resource. Costs are incurred to treat the affected employee and finding a replacement. Additionally, new employees must be trained which translates to more cost. During training, both the trainer and employee are less productive to the contracted company.
Financial Risks	Inexperience when quoting tenders is a common risk factor in bridge construction. Underestimations are likely to impact the contracted company negatively. On the other hand, price fluctuations affect large scale projects such as bridge construction. Contractors also create unrealistic cost schedules and estimates	Direct costs are incurred due to price underestimation. Implementation schedules may also be affected when funds are channeled for other uses. There might be reduced employee morale when employees realize there is a shortage of funds.

Table 1: Risk Register

Qualitative Risk Analysis

Qualitative risk analysis does not operate on numbers but rather on decryptions and recommendations (McNeil, Frey, and Embrechts, 2015). Analysts rely on available data and their expertise to come up with a systematic and creative plan.

	Impact
Probability			1 <$5,000	2 <$15,000	3 <$35,000	4 <$40,000	5 >$80,000
	1	0- 5 %	Low	Low	Low	Medium	High
	2	6 – 40 %	Low	Low	Medium	Medium	High
	3	41 – 70 %	Low	Medium	Medium	Medium	High
	4	71 – 85%	Low	Medium	Medium	High	High
	5	86 – 100%	Low	Medium	Medium	High	High

Table 2: Probability and impact matrix

	The main type of risk	Owner of risk	Cause	Effect	Level of Risk	Impact	Probability	Risk Response Strategy
1	Contractual risk	Contractor	Low Payment	Low productivity	3	$30,000	45%	Better employee remuneration
2	Financial Risk	Contractor	Price underestimation	Increased material and labor cost	5	$85,000	15%	Market Price analysis
3	Design Risks	Bridge Users	Design modifications	Structural weakness	5	$120,000	22%	Conduct preliminary studies
4	Management Risks	Contractor	Conflict among workers	Delay of project implementation	4	$39,000	10%	Employ conflict resolution personnel
5	Worker Safety	Contractor	Improper training	Work injuries and deaths	1	$4,000	5%	Proper training on equipment

Table 3: Risk register with matrix of risk

Quantitative Analysis

In this research, I will conduct the quantitative analysis using the expected monetary value. This method involves multiplying the probability of a risk occurrence with the value associated with the risk (McNeil et al, 2015). The total value is calculated by summing both positive and negative risks associated with a given project. This analysis will be most effective for my project to determine the amount of money that may be saved from the project or which supplementary amount will be required.

The expected monetary value will give an estimate of the average outcome of the risks mentioned for all events. The data availed also serves as a backup in making the most financially acceptable decisions. With the EMV figures, calculation of the contingency reserve will be based on actual data rather than mere estimations an observed with other methods. Above all, my choice was informed by the cheap cost of the analysis tool given that no specialized software will be required for the calculations.

Quantitative Risk Analysis Results Matrix

Design Risks estimation

Monetary value = 15/100 X 85,000 = $12,750; Period: 18 days

Financial Risks estimation

Monetary value = 22/100 X 120,000 = $26,400; Period: 26 days

Management risk estimation

Monetary value = 10/ 100 X 39,000 = $3,900; Period 13 days

Stephen J Manyall (2014) Therapeutic Risk Management: Civil and Building pp. 46